1996-08-09 04:00:00 PDT SAN FRANCISCO -- Police Chief Fred Lau has transferred the commanding officer of the department's narcotics division after a state-initiated raid on the Cannabis Buyers' Club.

Capt. Greg Corrales, a 27-year veteran of the force, is under scrutiny for what role, if any, he played in Sunday's bust - which has sparked community protests and outcries from The City's elected officials, including Mayor Brown.

Lau said Thursday that Corrales' transfer to Ingleside Station, where he will be the commanding officer, was not punitive and that it was part of a larger shift of captains and lieutenants. But, he added, moving Corrales from narcotics "helps us to be able to conduct an objective review of the entire situation."

Corrales appeared at a post-raid press conference Sunday with state officials. Lau and others on his top command staff have tried to distance themselves from the raid, which was overseen by state Attorney General Dan Lungren.

"We knew there was an ongoing investigation by the feds and the state and it was regarding narcotics dealing out of the Cannabis club, but we knew nothing about the raid," Lau said.

Narcotics Inspector Gary Delagnes, former vice president of the Police Officers Association and one of the most outspoken members on the force, said many officers in the narcotics division were upset over Corrales' transfer.

"He was made the fall guy in this; he's taken the bullet," Delagnes said.

The raid and its aftermath is the first major controversy in the Police Department since Brown took office in January. It's unlikely to go away soon, given the support of well-organized AIDS activists for the club, which sold marijuana to patients seeking relief from treatments for AIDS, cancer and other diseases.

So far, Brown has voiced support for Lau and has directed his criticism at Lungren.

Dozens of agents from the state Bureau of Narcotic Enforcement raided the club at 1444 Market St. and five other Bay Area locations early Sunday. Police made no arrests but confiscated more than 150 pounds of marijuana valued at about $750,000, some 400 growing plants and $60,000 in cash.

At the post-raid press conference, Corrales said one SFPD officer had been involved in the state and federal investigation. That officer, Joe Bannon, also works with the federal Drug Enforcement Administration. Corrales said he did not know the specifics of Bannon's assignment.

Although organizers of the five-year-old marijuana club say they sold pot only for medicinal purposes, law enforcement officials allege that the weed was made readily available to virtually anyone and was a big money-making enterprise.

The SFPD began investigating the operation in 1994 and pressed then-District Attorney Arlo Smith to go forward with the case, but he declined. The extent to which the SFPD pursued the case after that is unclear.

On Wednesday, Lau ordered an internal investigation into the incident that will examine whether:

*SFPD policies adequately address the department's involvement with other law enforcement agencies.

*Officers with ties to other law enforcement agencies serve the best interest of the department.

*There are protocols in place to assure adequate briefings and updates for the Police Department from other law enforcement agencies regarding investigations in The City.

Lau said he wants a report on findings and the recommendations by Sept. 15. After that, the Police Commission will convene a committee to review the document. &lt;